You are currently part of a university work experience program. Your job placement is at the municipal transit centre. Your supervisor is responsible for the recording and distribution of monthly transit passes to authorize vendors throughout the city. The vendors pay $50 per bus pass and sell them for $55. Your work experience job is to prepare a monthly reconciliation of the transit passes including the quantity sold, the number actually distributed, the unsold passes, and the cash proceeds. You are unable to reconcile the past two months. The bus passes are sequentially numbered and, in checking the sequence, you notice that numbers 9750 to 9820, 11012 to 11750, and 22000 to 22440 cannot be accounted for. You bring this to the attention of the supervisor, who tells you that reconciliations are never done; the job was created by her superior "to give you something to do" so you are told not to worry about it.
a. What is the main objective of internal control and how is it accomplished?
b. Why should recordkeeping for assets be separated from custody over the assets?
c. Do you report your findings?